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HomeMy WebLinkAboutReciprocal Easement Shared Use Agmt - Phase 1 and Phase 2 Reciprocal Easement and Shared Use Agreement Page 1 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 WHEN RECORDED MAIL TO: Midtown 654 LLC 233 E. Main Street, Suite 404 Bozeman, MT 59715 RECIPROCAL EASEMENT AND SHARED USE AGREEMENT THIS RECIPROCAL EASEMENT AND SHARED USE AGREEMENT (this “Agreement”), dated as of [DATE], is made by and between Midtown Aspen 4 LLLP, a Montana limited liability limited partnership, whose address is 233 E. Main Street, Suite 404, Bozeman, MT 59715 (“Midtown Aspen 4”); Midtown Aspen 9 LLLP, a Montana limited liability limited partnership, whose address is 233 E. Main Street, Suite 404, Bozeman, MT 59715 (“Midtown Aspen 9” and collectively with Midtown Aspen 4, the “Phase I Owner”); and Midtown 654 LLC, a Delaware limited liability company, whose address is 233 E. Main Street, Suite 404, Bozeman, MT 59715 (“Phase II Owner”). Midtown Aspen 4, Midtown Aspen 9, and Phase II Owner may individually be referred to as a “Party” and may collectively be referred to as the “Parties.” RECITALS A. Phase I Owner has acquired, or is concurrently or substantially concurrently herewith acquiring, certain real property located in Bozeman, Montana, which is legally described in Exhibit A attached hereto and incorporated by reference (the “Phase I Property”). B. Phase I Owner intends to construct on the Phase I Property certain improvements related to a 46-unit affordable rental apartment complex, commonly known as Midtown Aspen Apartments, including without limitation, the Phase I Facilities (defined below), and those improvements, buildings, structures, equipment, fixtures, landscaping, and all other facilities necessary to make such property and improvements usable and complete for their intended purposes (collectively, the “Phase I Project”). C. The Phase I Owner and the Phase I Project are part of the Midtown Aspen Condominiums and are subject to those certain [Declarations of Covenants, Conditions, and Restrictions Relating to the Midtown Aspen Condominium], recorded concurrently or substantially concurrently herewith in the real property records of Gallatin County, Montana (the “Declaration”). D. Phase II Owner has acquired, or is concurrently or substantially concurrently herewith acquiring, certain real property located in Bozeman, Montana, which is legally described in Exhibit B attached hereto and incorporated by reference (the “Phase II Property”). Reciprocal Easement and Shared Use Agreement Page 2 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 E. Phase II Owner intends to construct on the Phase II Property certain improvements related to a 50-unit rent restricted rental apartment complex, commonly known as Midtown 654 Apartments, including without limitation, the Phase II Facilities (defined below), and those improvements, buildings, structures, equipment, fixtures, landscaping, and all other facilities necessary to make such property and improvements usable and complete for their intended purposes (collectively, the “Phase II Project”). F. The Phase I Property and the Phase II Property are collectively referred to herein as the “Properties” and each, interchangeably, as the “Property.” The Phase I Facilities and the Phase II Facilities are collectively referred to herein as the “Facilities.” The Phase I Project and the Phase II Project are collectively referred to herein as the “Projects.” G. Each of the Properties includes certain parts or portions of the Projects which the Parties intend to be usable and accessible for their intended purposes by each of the Parties and by any person from time to time entitled to the use and occupancy of certain portions of the Projects, including without limitation each Parties’ Occupants (defined below) and/or Permittees (defined below), pursuant to the terms and conditions of this Agreement. H. The Parties desire to enter into this Agreement to establish certain easements, in, over, under, through and across each of the Properties relating to the access, development, use, operation, maintenance, repair, and replacement of each of the Properties and the Facilities for the Parties’ mutual benefit. AGREEMENT NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows: 1. Recitals. The Parties agree that the Recitals stated above are true and correct and form a material part of this Agreement upon which the Parties have relied. The Recitals are incorporated herein by this reference. 2. Phase I Facilities. The Phase I Facilities include without limitation: (a) the ground level areas and improvements (verses above ground) on and within the Phase I Project constituting walkways, sidewalks, and similar areas used for the passage of pedestrians and tenants of apartment units within any Property under any lease, sublease, license, or other similar occupancy agreement or arrangement, and their guests and invitees (collectively, “Occupants”), together with their associated lighting, signage, and benches for sitting, all as the same may from time to time be installed, constructed, and maintained for such use; (b) the areas and improvements on and within the Phase I Project constituting all ditches, drains, trenches, or any other water channels which provide storm water drainage, together with any associated pipes, lines, pumps, meters, valves, swales, and Reciprocal Easement and Shared Use Agreement Page 3 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 related equipment and facilities and other improvements, as the same may from time to time be installed, constructed, and maintained for such use; (c) the areas and improvements on and within the Phase I Project constituting entryways, driveways, drive aisles, roadways, vehicular parking stalls, vehicular parking spaces, and similar areas used for the passage of vehicles, together with their associated lighting, signage, curbs, gutters, striping, and other improvements, as the same may from time to time be installed, constructed, and maintained for such use; and (d) any other areas and improvements on or within the Phase I Project identified as or reasonably necessary for the Parties and their Occupants to access and use for their intended purposes as the same may from time to time be installed, constructed, and maintained for such use. 3. Phase II Facilities. The Phase II Facilities include without limitation: (a) the ground level areas and improvements (verses above ground) on and within the Phase II Project constituting walkways, sidewalks, and similar areas used for the passage of pedestrians and Occupants, together with their associated lighting, signage, and benches for sitting, all as the same may from time to time be installed, constructed, and maintained for such use; (b) the areas and improvements on and within the Phase II Project constituting all ditches, drains, trenches, or any other water channels which provide storm water drainage, together with any associated pipes, lines, pumps, meters, valves, swales, and related equipment and facilities and other improvements, as the same may from time to time be installed, constructed, and maintained for such use; (c) the areas and improvements on and within the Phase II Project constituting entryways, driveways, drive aisles, roadways, and similar areas used for the passage of vehicles, together with their associated lighting, signage, curbs, gutters, striping, and other improvements, as the same may from time to time be installed, constructed, and maintained for such use; (d) the structures surrounding and enclosing trash bins, containers, and dumpsters within the Phase II Project, together with trash bins, containers, and dumpsters therein, all as the same may from time to time be installed, constructed, and maintained for such use; and (e) any other areas and improvements on or within the Phase II Project identified as or reasonably necessary for the Parties and their Occupants to access and use for their intended purposes as the same may from time to time be installed, constructed, and maintained for such use. 4. Reciprocal Easements. The easements described in Sections 4(a) and (b) below shall be collectively referred to in this Agreement as the “Easements.” Each Party accepts, as Reciprocal Easement and Shared Use Agreement Page 4 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 applicable, the portion of each Property on which an Easement is granted hereunder in its “AS IS” condition and state of repair. (a) Phase I Project. Phase I Owner hereby grants to Phase II Owner, for use by Phase II Owner and the managers, partners, officers, shareholders, directors, employees, agents, contractors, property managers, vendors, suppliers, visitors, invitees, licensees (collectively, “Permittees”), and Occupants of Phase II Owner, as their activities relate to the intended development, use, occupancy, possession, maintenance, and repair of the Phase II Project, a non-exclusive and perpetual easement over and across, and right to use, the Phase I Property and any part or portion of the Phase I Facilities existing on the Phase I Property or relating to the Phase I Project, for such use as may reasonable and necessary pursuant to the terms of this Agreement. (b) Phase II Project. Phase II Owner hereby grants to Phase I Owner, for use by Phase I Owner and the Permittees and Occupants of Phase I Owner, as their activities relate to the intended development, use, occupancy, possession, maintenance, and repair of the Phase I Project, a non-exclusive and perpetual easement over and across, and right to use, the Phase II Property and any part or portion of the Phase II Facilities existing on the Phase II Property or relating to the Phase II Project, for such use as may reasonable and necessary pursuant to the terms of this Agreement. 5. Use of Easements. The Easements run with the land and shall burden and benefit the Phase I Property and the Phase II Property, as applicable, and any person acquiring or owning any interest in any portion thereof or any improvements thereon. No Party or such Party’s Permittees or Occupants may: (a) use or permit the use of the Easements or the Facilities so as to unreasonably interfere with the use by the other Party or its Permittees or Occupants; or (b) unless mutually approved, create, or permit any fence or barricade on, or any obstruction of, the Easements or the Facilities, except as may be permitted under Section 6 of this Agreement. The Easements and the Facilities are to be used solely for the purposes set forth in this Agreement. This Agreement does not grant or create any other rights, licenses, easements, or interests in any portion of the Properties or the Projects, except as expressly provided in this Agreement. 6. Rules and Regulations Applicable to the Facilities. To the extent possible, each Party, and their respective successors and assigns, acknowledges the existence of and agrees to abide by and comply with all applicable covenants, conditions, and restrictions contained within the Declaration regarding any part or portion of the Easements, the Projects, and/or the Facilities, and any related rights and obligations described in this Agreement. The Parties shall have the right to establish, administer, and enforce reasonable and non-discriminatory rules and regulations governing the use and enjoyment of their respective Projects and Facilities, and the Parties and their Permittees shall abide by such rules and regulations. Any Occupant or Permittee of a unit on any Property violating such rules shall be subject to such penalties as reasonably adopted by the owner of the applicable Project or Facility. Except as otherwise provided in this Agreement or otherwise approved by the Parties, no Party shall impose any rule or collect any charge, fees, or other amounts from any third-party for the use of any Facilities located on such Party’s Property unless such rule, fee, or charge: (a) is reasonable and approximately equivalent to similar charges imposed within the vicinity of the Property; (b) is levied uniformly as to all Occupants, Permittees, Reciprocal Easement and Shared Use Agreement Page 5 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 or other guests within the entire Property; (c) are not rebated or otherwise credited back to any Occupant or Permittee of a unit on the Property; (d) are clearly excludable from rent; and (e) are not inconsistent with the requirements of any tax-exempt financing or tax credit program applicable to the Phase I Project. Any such fees or charges will be collected at the same time and in the same manner as rent is charged and collected. 7. Obstructions. No Party shall construct, install, or place any barrier or obstruction on any portion of the Property so as to obstruct access to or the use and enjoyment of the Easements, provided that any Party may temporarily restrict access to the Easements for maintenance, repair, and construction, which shall be undertaken in a timely manner and which closure shall be for the shortest reasonable period of time. 8. Compliance with Law. Each Party, its Permittees, and its Occupants shall comply with all applicable rules, laws, ordinances, and regulations regarding any use or occupancy of any part or portion of the Easements and the Facilities. 9. Retained Rights. Subject to the terms of this Agreement, each Party retains all rights in and to its respective Property that do not materially burden or interfere with the other Party’s use of the Easements or the Facilities for the uses described herein. 10. No Rights Vested in General Public. Nothing contained in this Agreement shall ever be deemed to create any rights for the benefit of the general public, or to constitute any of the affected areas a dedicated public thoroughfare for vehicles, bicycles, and/or pedestrians or other lawful use. The Parties are hereby obligated to do all things necessary to perpetuate the status of the Easements as private easements, including cooperating with each other in the periodic publication of legal notices or physically barring access to the affected areas as may be required by law for the purposes expressed in this paragraph; provided, however, that prior to closing off any substantial portion of the Easements or the Facilities, as herein provided, the Party requesting such closing shall give written notice to each other Party of its intention to do so and shall attempt to coordinate such closing with each other Party so that no unreasonable interference with the passage of vehicles or passage of pedestrians shall occur. This Agreement is enforceable only by the Parties to this Agreement. 11. Maintenance. The Parties agree that each Party shall maintain or cause to be maintained any portion of the Easements and the Facilities located or to be located on such Party’s respective Property in good condition and repair in accordance with all applicable governmental rules, ordinances, and regulations (including building and fire code rules and regulations), as well as sound engineering practices. Phase I Owner shall be solely responsible for any and all maintenance of any part or portion of the Easements or the Facilities that exists on, over, across, or through the Phase I Property or relating to the Phase I Project. Phase II Owner shall be solely responsible for any and all maintenance of any part or portion of the Easements or the Facilities that exists on, over, across, or through, and any part or portion of the Phase II Property or relating to the Phase II Project. In the event that any Party fails to comply with its maintenance obligations as set forth herein, which failure continues for more than thirty (30) days after the date of delivery of written notice of such default to the Party responsible for such maintenance, each other Party shall be entitled to: (a) enter the Property of the Party responsible for such maintenance for the Reciprocal Easement and Shared Use Agreement Page 6 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 purpose of performing such maintenance activities as are necessary to restore the Easements or the Facilities to good condition and repair; (b) expend such funds as are reasonably necessary to provide the necessary maintenance; and (c) submit an immediate invoice to the other Party for the reasonably expended funds, which amount shall be due and payable within ten (10) days of the date of receipt. 12. Tenant Notice; Emergencies. Unless in the event of an emergency, any Party performing or causing to be performed any maintenance, repair, or other work that may cause a temporary closure of any part or portion of the Easements or the Facilities or otherwise interfere with the other Party, its Permittees’, or its Occupants’ use of the Easements or the Facilities, shall provide the other Party with prior notice of such temporary closure or interference no less than forty-eight (48) hours prior to commencement of any such work. In the event of an emergency, the Party performing or causing to be performed such maintenance, repair, or other work shall endeavor to provide each other Party with notice of such temporary closure or interference as soon as practical after commencement of such work. 13. Insurance. Each Party shall be responsible for providing for the maintenance of insurance coverage in amounts reasonably acceptable to both Parties covering its respective Property and its interest in and use of the Easements and the Facilities (including, as applicable, broad form public liability insurance covering construction, installation, use, and repair of the applicable Property and related improvements), and shall upon request deliver to each other Party a certificate evidencing such insurance and each shall cause their insurance carrier to name each other Party, the Investor Partner(s) (defined below) of any Party, and/or any lenders of any Party, as required, as additional insured on its general liability policy. 14. Cooperation. Each Party agrees that in the exercise of any rights granted to it pursuant to this Agreement, the Party shall use reasonable efforts not to interfere with each other Party’s operations or with the use and enjoyment of the Easements and the Facilities by each other Party, its Permittees, and its Occupants. 15. Liability For Certain Damages. Notwithstanding any other provision in this Agreement to the contrary, each Party shall be solely responsible for the repair of any damage caused to the Easements, the Facilities, or the Property of each other Party which damage results from the negligence or willful misconduct of such Party, its Permittees, or its Occupants. 16. Assignment. No Party may assign or delegate its rights or obligations under this Agreement without the prior written consent of each other Party (which consent shall not be unreasonably withheld, conditioned, or delayed); provided, however, this Agreement shall run with the land and be binding upon and inure to the benefit of the Parties’ successors in interest to their respective Property. 17. Appurtenant; Inurement. The Easements, restrictions, and agreements herein shall run in perpetuity with the title to each Property for the benefit of the other Property. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. Reciprocal Easement and Shared Use Agreement Page 7 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 18. Indemnity. Each Party shall indemnify the other Party, its Permittees, and its Occupants against any loss or damage, including reasonable attorneys’ fees, arising out of the use of the Easements or the Facilities by the indemnifying Party, its Permittees, and its Occupants, excluding losses or damages directly caused by the gross negligence or willful misconduct of the Party claiming indemnification or such Party’s Permittees or its Occupants. 19. Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the address shown above. Any Party may change its address for notices under this Agreement by giving formal written notice to the other Parties, specifying that the purpose of the notice is to change the Party’s address. 20. Investor Provisions. Each Party agrees that in the event of default, written notice of such default shall also be provided to each other Party’s limited partner(s), as applicable (each, an “Investor Partner”). Each Party will allow each such Investor Partner up to thirty (30) days after delivery of such notice of default to cure any monetary default under this Agreement (it being acknowledged by the Parties that no Investor Partner shall have any obligation to cure any default by a Party hereunder). Each Party will allow each such Investor Partner up to sixty (60) days after delivery of such notice of default to cure any non-monetary default under this Agreement; provided however that, in the event a non-monetary default is not susceptible to being cured within such sixty (60) days, the non-defaulting Party will allow such Investor Partner such additional time as reasonably necessary to cure such default, provided such Investor Partner has commenced to cure such default within the original sixty (60) day cure period and is diligently and continuously proceeding to cure such default through completion of such cure (it being acknowledged by the Parties that no Investor Partner shall have any obligation to cure any default by a Party hereunder). For purposes of this Agreement, the Parties acknowledge that each of the following entities are an Investor Partner and shall each receive copies of any notice required hereunder at the following addresses and shall each benefit from any such investor cure rights set forth herein: Phase I Investor Partner: [___] Phase II Investor Partner: TBD 21. Mortgagee Protection. No portion of this Agreement or any amendment or violation thereof shall operate to defeat or render invalid, in whole or in part, the rights of any existing beneficiary, insurer, guarantor, or holder of any mortgage or deed of trust holding a lien or other encumbrance upon any portion of the Properties if such lien or other encumbrance is senior to this Agreement. Reciprocal Easement and Shared Use Agreement Page 8 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 22. Miscellaneous. (a) This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and all prior agreements, negotiations or understandings will be deemed to be merged into this Agreement. (b) The provisions of this Agreement are severable, and if any provision is found to violate any law or public policy, the remaining provisions shall remain fully enforceable, and the affected provision shall be deemed to be amended to conform with applicable law or public policy while, insofar as possible, retaining the original import of such provision. (c) Notwithstanding any course of conduct between the Parties, no amendments, waivers, modifications, or termination of this Agreement will be made or deemed to have been made unless in writing and executed by all Parties and consented to by all Investor Partner(s) and the Parties’ lenders. (d) No failure by a Party to insist upon the strict performance of any term, covenant, or provision contained in this Agreement or to exercise any right or remedy under this Agreement, or other action or inaction by such Party (other than execution and delivery of a written waiver) will constitute a waiver of any such term, covenant, or provision, or a waiver of any such right or remedy, or a waiver of any default by the other Party. (e) Any waiver of a breach of a term or a condition of this Agreement will not prevent a subsequent act, which would have originally constituted a default under this Agreement, from having all the force and effect of a default. (f) Each Party shall have the right to grant such other easements, rights, or privileges to such persons and/or entities and for such purposes as such Party shall elect in its sole discretion, so long as such easements, rights, privileges, or purposes do not unreasonably interfere with the easements and rights granted in this Agreement. (g) The substantially prevailing Party in any litigation or an arbitration that arises under this Agreement shall be awarded reasonable attorneys’ fees, costs, and other expenses incurred in such proceeding, including any appeal. (h) Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement. (i) This Agreement shall be construed under the laws of the State of Montana, disregarding conflicts of laws principles. (j) This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall together constitute one and the same document. Signatures transmitted by facsimile or email shall be valid and binding for all purposes. Reciprocal Easement and Shared Use Agreement Page 9 Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 {Signature page(s) to follow} Reciprocal Easement and Shared Use Agreement Signature Page Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 PHASE I OWNER: MIDTOWN ASPEN 4 LLLP, a Montana limited liability limited partnership By: Midtown Aspen 4 GP LLC, a Montana limited liability company its General Partner By: Midtown Aspen BD LLC, a Delaware limited liability company its Manager By: Boundary Development LLC a Montana limited liability company its Managing Member By: __________________________ Name: ________________________ Its: Managing Member STATE OF ______________ ) :ss County of ______________ ) This instrument was signed and sworn to before me on __________ ___, 2024, by __________________________, Managing Member of Boundary Development LLC, Managing Member of Midtown Aspen BD LLC, Manager of Midtown Aspen 4 GP LLC, General Partner of Midtown Aspen 4 LLLP. WITNESS my hand and official seal. ____________________________________ Printed Name: ________________________ Notary Public for the State of ____________ Reciprocal Easement and Shared Use Agreement Signature Page Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 PHASE I OWNER: MIDTOWN ASPEN 9 LLLP, a Montana limited liability limited partnership By: Midtown Aspen 9 GP LLC, a Montana limited liability company its General Partner By: Midtown Aspen BD LLC, a Delaware limited liability company its Manager By: Boundary Development LLC a Montana limited liability company its Managing Member By: __________________________ Name: ________________________ Its: Managing Member STATE OF ______________ ) :ss County of ______________ ) This instrument was signed and sworn to before me on __________ ___, 2024, by __________________________, Managing Member of Boundary Development LLC, Managing Member of Midtown Aspen BD LLC, Manager of Midtown Aspen 9 GP LLC, General Partner of Midtown Aspen 9 LLLP. WITNESS my hand and official seal. ____________________________________ Printed Name: ________________________ Notary Public for the State of ____________ Reciprocal Easement and Shared Use Agreement Signature Page Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 PHASE II OWNER: MIDTOWN 654 LLC, a Delaware limited liability company By: Midtown 654 BD LLC, a Delaware limited liability company its Manager By: Boundary Development LLC a Montana limited liability company its Managing Member By: __________________________ Name: ________________________ Its: Managing Member STATE OF ______________ ) :ss County of ______________ ) This instrument was signed and sworn to before me on __________ ___, 2024, by __________________________, Managing Member of Boundary Development LLC, Managing Member of Midtown 654 BD LLC, Manager of Midtown 654 LLC. WITNESS my hand and official seal. ____________________________________ Printed Name: ________________________ Notary Public for the State of ____________ Reciprocal Easement and Shared Use Agreement Exhibit A Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 EXHIBIT A Phase I Property Midtown Aspen 4 Midtown Aspen 9 Reciprocal Easement and Shared Use Agreement Exhibit B Midtown Aspen 4, Midtown Aspen 9, & Midtown 654 EXHIBIT B Phase II Property